Nevada Regulators Give Approval to Eldorado-Caesars Merger
Eldorado Resorts and Caesars Entertainment are closer to completing their $17.3 billion deal after Nevada regulators approved it on Wednesday.
The Nevada Gaming Control Board and Nevada Gaming Commission, in special meetings taking place right after each other, gave their approvals to the deal.
The merger, which has already been approved by the Federal Trade Commission, would create the largest casino operation in the U.S. Two hurdles are left as Indiana and New Jersey regulators need to approve the merger.
Nevada regulators on Wednesday also approved William Hill taking over operations of Caesars sportsbooks. Willam Hill, the sportsbook provider for Eldorado, currently has 113 sportsbooks in Nevada.
Caesars currently owns 53 properties worldwide, 39 in the United States. Eldorado owns 21 properties in 11 states. The deal puts a total of 60 casinos and resorts in 16 states under one umbrella.
The Nevada Gaming Control Board spent about three hours questioning executives from both companies about finances of the deal, structure of the company after the merger, business synergies and diversity initiatives. Many of the questions from board members centered on the amount of debt in the deal.
Both companies saw profits decline in the first quarter of 2020 as casinos had to close around the country. Caesars was down 13.6% while Eldorado’s net revenue dropped 25.6% from January to March 2020.
Reopening Of Casinos ‘Exceeded Expectations’
But Eldorado CEO Tom Reeg said Wednesday that revenue since his company’s casinos reopened has “exceeded expectations.” He said going forward after the deal goes through he would look to increase revenue from Caesars’ properties.
Reeg said that about 1,000 jobs, many in the corporate offices, would be lost because of the merger. In addition, Eldorado and Caesars will look into selling some properties — including Caesars’ international facilities.
The FTC approved the merger on June 26, accepting a proposed consent order. Caesars and Eldorado shareholders had already given their approval.
The merger was initially announced on June 24, 2019. The merged company will keep the Caesars branding.
“Together, we will have an extremely powerful suite of iconic gaming and entertainment brands, as well as valuable strategic alliances with industry leaders in sports betting and online gaming,” Reeg said in a news release when the deal was first announced. “The combined entity will serve customers in essentially every major U.S. gaming market and will marry best-of-breed practices from both entities to ensure high levels of customer satisfaction and significant shareholder returns.”
Some Eldorado Properties Sold To Twin River
Twin River Worldwide Holdings in late April agreed to buy two Eldorado Resorts casinos — one in Louisiana and one in Nevada — and a Caesars casino in New Jersey. The deals are contingent on Eldorado-Caesars merger being completed. Just last week Twin River bought two more Eldorado properties.
Eldorado Shreveport Resort and Casino in Shreveport, Louisiana; and MontBleu Casino & Spa in Lake Tahoe, Nevada, will be purchased by Twin River. The FTC had mandated the sale of the MontBleu.
The cost for the two Eldorado properties is $155 million, according to the release. Bally’s Atlantic City Hotel and Casino in New Jersey is being acquired from Caesars for $25 million in cash.
Twin River also acquired the Lady Luck Casino in Vicksburg, Mississippi, and the Isle of Capri Casino in Kansas City, Missouri, for a combined $230 million, according to news releases on July 2.
What’s Next For The Merger
After the Nevada approvals, the companies now head to Indiana and New Jersey to gain approval from their regulators.
The Indiana Gaming Commission is scheduled to meet Friday, the Indiana Horse Racing Commission meets Monday and the New Jersey Casino Control Commission is scheduled to meet on July 15.
Bloomberg Law reported this week that the Indiana Horse Racing Commission was not going to offer an “enthusiastic or unqualified” recommendation to the deal. Commission staff members said Eldorado is not that interested in horse racing and will ask that conditions be placed on the deal, according to the report.
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